New horizon

I’ll be writing from there for the `Web Sight’ Fred Hollows page, which you’ll find down the right hand column of the Herald online home page. The address is smhhollows. To contribute to the Webpage, email


I’ll continue the Webdiary from South Africa but on a more irregular basis. Email me at, or send to the usual email, which I’ll divert while I’m away.


I hope to be full of new ideas and new energy for the year ahead by the time I get back. I’ve received many ideas to redesign the Webdiary, and hope we can get into that too. Now is a time for hope.





In case you missed the idea behind the Hollows project, I republish a piece I did on it this month. Thanks to all those who’ve given me the names and numbers of people to look up in South Africa.


Hollows Foundation trip should be a real eye opener


Australian politics is an arid place that isn’t going to change any time soon. But outside government there are reasons to be hopeful, writes Margo Kingston.


It looks like I’ve finally made a new year’s resolution I’ll keep – to do something useful – courtesy of, of all things, a work memo.


It landed in early October, post-Tampa/pre-Tampa election, after the ever-maverick Fred Hollows Foundation decided to ask my bosses not for free advertising but for a couple of free journalists. Was anyone keen to use their holidays working for the foundation, with Fairfax to pay for two air tickets?


Yes, please, said too many photographers, writers and editorial managers, so the foundation’s chief executive officer, Mike Lynskey, found sponsors to send about 20 around the world and to indigenous communities in Australia.


The Hollows lot lets blind, poor people see by removing cataracts and putting in intra-ocular lenses. They’ve systematically revolutionised the technology so the operation is cheap enough to do in countries such as Nepal, Eritrea and Cambodia. They’ve trained locals to do the work and administration. They’ve built and funded lens factories in Nepal and Eritrea which export to the world and keep the multinationals honest on price and the carpetbaggers honest on quality.


They’re a home-grown, home-managed international charity. They accept no more than 20 per cent of their funding from government, so that if needs be they can go it alone. It’s called independence.


I’m going to South Africa next month, where the foundation will launch its first program there, in Eastern Cape, the country’s poorest province. White South Africans say nothing ever works there. Time will tell.


When I mentioned the trip in the online Herald Web Diary, a reader, Keith Conley, who said he had worked as a medic in Soweto, wrote: “My strong advice is to leave your liberal assumptions at home if you want to survive. You’re white and therefore a rich and easy target for the boys. Your internationalism won’t really cut it with some of the characters you’re going to meet.”


“This is not meant to deter you. If you can stomach it, it’ll change your life. You might even start to appreciate your own country and what it has achieved with integrating a huge immigrant intake over a relatively short period. Mind you, there is still the lingering question of our indigenous brothers and sisters, but you won’t have to worry about them in the Eastern Cape. You can leave that to us while you expunge your Tampa guilt.”


True enough, Keith, but there’s also another motivation. I’m finding federal politics and the intellectual debate between Left and Right, reflecting the dead heart of Australian politics today, unbearable. New year’s resolution: escape the desert, renew hope. The foundation – which receives its cash and kind donations from Australians of all walks of life and of many political views – is a symbol of our identity most of us can sign up to, leaving us free to explore in relative harmony what the best face we can show to the world looks like.


Lynskey has two goals apart from free help. He wants us to record the untold stories of the people in some of the world’s poorest countries who have made it happen and to interrogate the foundation’s people to draw out what they are on about. The result will be a book and input into an international conference in Sydney in May.


Which got me thinking. Since so many hacks are interested, might some readers feel the same way? Late last year, I wrote in Last Word that the media needed to do more bottom-up reporting. So how about we start here? And why not go further and ask readers to join the process?


The Herald and The Age online team is designing a Hollows journos Web page to be up and running soon. The journos will tell you who they are and why they’re doing this, and on the road they’ll file whatever they like whenever they like. We’ll introduce you to the key Hollows players here and around the world. We hope readers will raise issues for debate, relate personal experiences and ask questions of the journos and the foundation. We’ll publish reader contributions alongside those of the journos.


Overseas aid – the politics, the philosophies, the cultural clashes, the successes and failures, the visions – is not a topic covered much by our media and, when it is, it is the abstract stuff about how our aid budget keeps getting cut.


The Web page will be open for business on all this and more, under the editorial control of Fairfax. Ideas welcome.


The Fred Hollows foundation journos page will be online tomorrow. See Happy new year for details. There’ll be a pointer on the front page of; the address will be To contribute to the page, email the page editor, Amanda Vaughan, at I’ll be in South Africa from early next month and will contribute to the Hollows Webpage. Webdiary will lie low from then until the end of March.


I’m finding this Enron saga completely compelling. The more that comes out, the more obvious it is that this company systematically compromised all available checks and balances, had no ethics regarding its staff or shareholders and thought nothing of not only paying no tax, but claiming taxpayer rebates. The presence of management gurus McKinsey’s throughout Enron’s rise is also a fascination, as its the fact that it began life as a privatised gas company.


Anderson’s, the auditors, had lucrative other work with Enron, and when the shit hit the fan destroyed documents. Enron successfully lobbied Congress to stop any outside scrutiny of the energy futures market in which it operated, and to stop the shutting of its tax avoidance schemes. The Regulator agreed to delay examination of Enron’s accounts because it was underfunded and the accounts were so complicated the bottom drawer looked enticing. Several high profile Enron board members received Enron funding for their other activities. Enron threw cash at the Republicans and some Democrats, and directly influenced energy policy to suit itself. At the end, the chief executive sold more than $100 million shares at the same time as he told employees reliant on their Enron shareholdings for their retirement incomes to hold on.


The result: avoidance of scrutiny by anyone, scams to disguise company losses, huge bucks for the big boys throughout the system, huge losses for the punters and the smell of a rotting system.


The inescapable conclusion is that self-regulation is a nonsense, conflicts of interest are endemic, and rampant unregulated capitalism contains the seeds of its own destruction, as well as that of good government and professionalism among professionals.


It’s the end-game of neo-liberalism, where only money and self-interest in terms of getting more of it matters. How can other values be re-elevated, to save capitalism from itself? And is the Yank’s version of capitalism really the one we should emulate? I hope lots of experts jump on this example to really learn from it conceptually, rather than pick at the edges of it. And I wonder whether Enron is just the beginning of the unwinding of the Yank’s economic miracle and will finally break the dominance of the neo-liberal “value system”.


As I’ve mentioned before, there’s a great summary of what Enron business actually did to get so big and powerful in the quarterly report of Australian fund manager Platinum Asset Management. enron, on page 8.


At the end of this entry is a statement by a group called VOW with a suggested process for a fairer, more stable world. Pie in the sky stuff, but something’s gotta give, surely.


Today, regulars David Davis, Robert Lawton and Allison Newman debut for 2001 on Woomera, the Hanson legacy, and David Hicks, all issues on which Australians are sharply divided, as shown in contributions by Derek, Sara Michell, Graham Hawkins, Barry Rutherford, Ryan Carrington, Noel Hadjimichael and Neale Talbot.


The three issues seem to merge somehow. Goodbye rule of law. Goodbye the presumption of innocence, goodbye the universality of human rights as a foundational principle of liberal democracy. Without all those, only might is right.





David Davis in Switzerland


Happy New Year! I hope your Christmas period was fun – mine was and it was great to be back in Sydney, if only for a short time. It’s evening in Switzerland and I just got home to reports on the evening television news about mouths being sewed up in detention camps in Australia. I’m angry.

I had thought earlier in the day that these stories don’t seem to come out of any other civilized country. Now I see it is at centre stage internationally again. Australia is in prime time in Europe again. Mr Ruddock says that the practice offends the sensitivities of Australians. I actually think sensitivities are being offended everywhere, for various reasons and many are not the same as Mr Ruddock’s reasons. I’m offended and it’s not by the people in the camps.


I’d rather just forget the whole thing. Block it out, ignore it, not my problem.


The more grotesque it becomes, the easier it gets. For some at least. I mean this is unbelievable. A large number of genuine refugees (we can’t nominate the exact percentage) locked up in the desert, others being sent to poor neighbours in the Pacific, the kids being tossed in the water story, lips being sewed up….. all in all it is an ugly picture.


I find it extraordinarily difficult to connect with majority opinion on this issue. I tried at Christmas and failed. The Tampa even sailed right past us on Sydney Harbour at one stage. I couldn’t believe it – to literally have it in my face! My reaction to seeing it though was not the same as those I was with. I’ve never felt less connected.


At one stage over Christmas I was attacked as being a kind of “Fairfax/ABC” person. It went on and on and on. This is where I feel I have entered some kind of separate orbit. I do not regard myself as a dreaded “chardonnay socialist” (I suppose that term is now as dated as sun dried tomatoes), but have been shunted into that camp because I dare to question the orthodoxy. It is clearer than ever that one form of political correctness HAS replaced another. You are spot on with that Margo. Somehow I have ended up being “incorrect” in both cycles! Such a contrarian!


Australia has much to be proud of in the area of refugee resettlement. There certainly hasn’t been much of a reason to apply the black arm band to that history. Until now. It really didn’t have to be this way. In reality we could have adopted a more humane approach without opening the floodgates. This era will be sorely regretted.


The economy in Australia is walking all over the rest of the western world. No other country has such growth rates and such a favourable outlook. It is a wonderful thing, but it makes the lack of compassion and bloody mindedness all the more unforgivable. Rich, selfish, small, inward and isolated – when all the reasons exist to be the opposite.




Derek in Sydney


Before we get too hysterical about lip sewing or Phillip Ruddock’s (non) reaction to it, the whole situation in the Woomera Detention Centre should be put in context. It’s a political arm wrestle. No more, no less. The acts by the detainees (like arson and vandalism and hunger strikes and lip sewing) are designed to draw media attention and influence public opinion. Ruddock is playing the role of political opponent as best he can. It could be attack dogs on the waterfront or greenies chaining themselves to trees in virgin bushland or violence on a union picket line. It happens not to be.


It should be understood that anyone from Afghanistan is on the verge of being sent home. Having risked lives and life’s savings, the gamble looks like not paying off. One last gamble has to be worth their while. Perhaps if we actually reach the point of preparing the Afghanis for departure, New Zealand will bail us out again (and while they’re at it could they let us win at least one cricket match?).


Sure, this arm wrestle is a little more confronting than we are used to. (Gee, am I echoing Ruddock here? Australians simply don’t like confrontation.) Sure, it would be nice if the stakes weren’t quite so obviously people’s futures but we weren’t given any easy choices and we shouldn’t pretend otherwise.


To add to Brendan’s comments about Ruddock’s strategy in Decency, our way, I would like to make the observation that Ruddock is unremittingly calm. Minister of Immigration is a tough job right now and it would be easy to be loud and rude. I believe the consistent non-reaction is part of the strategy. It is a contrast to the detainees. Is this “non-violent” racism? (I would also like to thank Tim Dymond and Brendan for their help in the numbing down of the word “racist”. “Wolf!”)





Sara Michell in Surry Hills, Sydney


I think Mr Ruddock and Mr Howard should be indicted for Crimes Against Humanity. Come on Australians, what has happened to our values of mateship and fairplay, or does that only apply to white Australians?(MARGO: Except for David Hicks.)


I feel sickened by the treatment of asylum seekers by the Australian Government, but Australians voted them in. My Danish Grandfather was in the Resistance in Denmark during WW11 against German Occupation, and that tiny country saved nearly all its Jewish people from concentration camps by helping them escape to Sweden. He would be rolling in his grave to see a so called civilised democratic country such as Australia treating refugees in the way we are.


It’s time to stand up and get active do what we can to change this appalling situation.




Ryan Carrington


I have enclosed a copy of a letter I will proudly send to Mr Ruddock……I am hoping some healthy discussion and debate could ensue if this is published.


Mr Ruddock,


In a time where, due to our obviously objective media (not) , you seem to be receiving somewhat negative publicity I would like to commend and congratulate you on your firm position with regards to asylum seekers on Australian soil.


Too often, I watch our political representatives make the promises only to do a major backflip when the pressure starts to tell. Refreshingly, you have not succumbed to this pressure and continue to maintain your tough but fair position.


While these asylum seekers continue to mutilate themselves in the name of desperation and continue to burn and damage Australian property at tax payers expense, they win no brownie points with me. To claim refugee status, they must have come from areas where their lives are in imminent danger, where simple existence is not assured. They and their misguided sympathisers then have the audacity to feel justified in making uneducated and downright slanderous claims about their treatment while in “detention”. Compared to the conditions they were forced to endure before applying to become refugees, our “detention” centres must be a Sheraton hotel.


Let them continue to mutilate themselves and those that don’t like the way we do things in Australia honestly don’t have to be here …. we don’t force them to stay. It is very simple, very logical and very fair, something that even our massive cultural differences can’t blur understanding of. These people claim they are desperate for a new life …. if it takes 2 years of “detention” for processing of an application, then so be it. It’s better than being dead if you ask me.


Keep up the good work and weather the storm you face – I fear it will be a severe one. For too long we have needed these tough measures and the tough decision makers to make it all happen. I am confident, given your recent track record, that we have finally found the man for the job.




Robert Lawton in Adelaide


The world’s most newsworthy Australian today might not be Nicole Kidman, but a man in shackles, mittens and a mask, jailed in a dot of US territory surrounded by guns and wire.


The remarkable bowing and scraping to America by Daryl Williams and Robert Hill over the fate of David Hicks has saddened but hardly surprised me. In the end the difference between the ALP and Coalition on “terror” (ie revenge attacks by the USA on Al Qaeda) is minute.


There are reportedly three British citizens at Guantanamo Bay. Not only have their country’s diplomatic representatives visited them, there is fierce opposition on UK Labor’s backbench to their continued, indefinite detention by the US in apparently inhuman conditions; and further, heavy criticism of the US’ characterisation of the Guantanamo men as being beyond the reach of international law on prisoners of war.


Interestingly enough, the Guardian reports on Monday 21 January that a crossparty parliamentary committee has condemned the US’ attitude.


Where is the Australian critique of America? It seems limited to an Adelaide solicitor, Stephen Kenny, searching for pro bono legal support in the US for the Hicks family.


How pathetic that neither our national government or opposition – not one backbencher or retiring senator – is strong enough to stand up and identify tyranny when they see it.


Or perhaps they truly cannot see. Once again we see in action the politicians we deserve…



Graham Hawkins


I hear the civil libertarians, left wing governments and others are starting to knuckle under as they see they way the prisoners, and prisoners they certainly are, are being treated at the camp in Cuba. Isn’t it interesting that a mere four months after the most horrific act of murder and cowardly terrorism that people seem to have developed selective memories?


As one US Officer said when interviewed, “These prisoners get fed, housed, showered and clothed. In fact they have better accommodation than I have, as I have to work 12 hour shifts and live in a tent”.


Come people, wake up. These people are the most dangerous people on the planet, these are people with absolutely no conscience, would kill you and I as soon as look at us, and would cheat justice by taking their own lives if they could. They are getting what they deserve and if they don’t like it they should have disassociated themselves from there actions a long time ago.






Allison Newman in Point Clare, NSW



For me, the Hanson legacy can best be summed up by saying that we have returned to the political environment portrayed in D.H. Lawrence’s “Kangaroo”. And the funny thing is, when I read that novel at the Defence Academy, I thought that D.H. Lawrence must have been way off base. Shows how little I know.




Noel Hadjimichael in Sydney


I listened to your contribution on Radio National’s Australia talks back last night and was pleased to note that the debate over the “culture wars” is still happening. In the wake of the federal election, Tony Abbott’s speech and the Hanson departure, the struggle to define what is the Australian political, social and economic consensus remains.


There may never have been any “consensus” in the last one hundred years – merely a dominant majoritarian perspective (such as White Australia in the 1920s, empire loyalists in the 1940s, anti communist in the 1950s, progressive on north-south issues in the 1970s and economic rationalism in the 1980s) and a minority counter opinion (such as anti-empire nationalism in the 1940s, anti-nuclear pacifism in the 1950s, anti-globalisation now).


What we have seen in the last 5-7 years has been the steady demise in public support for the Hawke/Keating settlement – economic rationalism laced with “progressive” policies on race, gender, human rights and national symbols. The deal was seductive to the Left – trust us (the Labor Right) to run the economy, and we give Australia a fresh start in social, welfare and international policy.


The inherent problem was the tension between true social change (which takes time to earn majority support beyond the elite) and immediate economic structural change (which happens straight away). (MARGO: My emphasis – great point!)


Many traditional working class and lower middle class Labor voters, neither ideological or part of the “patronage” system, saw shifts in social policy which they either didn’t agree with or didn’t fully understand whilst seeing their jobs or their kids jobs vanish, their (often regional) communities decline or their relative economic interest harmed (privatised services or no services).


The Howard government has tapped a strong vein of nationalism, concern over border control, rejection of symbolic change (e.g. the Republic and the Treaty push), downward envy of welfare rorts and a legitimate desire for stability, security and safety.


Howard didn’t wait for the US cavalry to arrive to do something about East Timor, attack Hanson for being a relatively naive and poorly educated public figure, make welfare easier to get or shy away from helping new non-public schools in areas like western Sydney get funding starts.


The culture wars are still being fought but I suspect that we have seen a new majoritarian perspective being adopted by the broader community. It is sceptical about government’s ability to improve outcomes, opposed to welfare enhancement, low migration focused, critical of symbolic change and desperately keen on low interest rate prosperity.




Neale Talbot in Sydney


The Australian government will spend almost $50M this year on the detention centres (or Detention Camps as CNN calls them [1]) that house the 2,500 thousand odd “illegal immigrants”. If only the people coming out of Afghanistan weren’t “illegal”, and had applied for legal immigration at the Australian Afghan embassy [2], then we wouldn’t have to spend all this money keeping them locked up until the war ends when we will ship them back home to complete safety[3].


But, say, what would have happened if we had taken that money and spent it on increasing the population of Australia by 0.015% by setting up the immigrants properly for their new stay. The $50m could be spread across the immigrants evenly at $20,000 a head. Add this to the new home-buyers grant, and each immigrant would have enough for a deposit on a house. With a mortgage to pay off, jobs would quickly follow. The money, in effect would be injected straight back into the Australian economy, and therefore (through taxes) back into the pocket of the Government. Immigration could become a national a cottage industry. But John Hanson … er, Howard, is hardly likely to accept such a stand, and so more money will be poured down the drain.


I’ve been reading the comments about Poor Pauline on the Webdiary, and none of them get to the core of Pauline; the fact that, in an absurd kind of way, she was calling for an end to the unspoken apartheid in Australia. After all, apartheid is essentially the policy or practice of separating or segregating groups of people in the one country, and that certainly the policy of our current government. Keep the foreigners off our shores (or in prison), keep the blacks in the bush (or in prison), keep the lebanese in Cabramatta (or in prison) and all will be well.


Pauline spoke against the different laws for Aborigines and white Australians. Pauline asked why ATSIC funding was not being properly managed and overseen like white organisations. Pauline demanded discussion about multiculturalism as opposed to balkanism. Her party, “One Nation” stood for equality for all, despite the colour of your skin. Australia, it seemed, was not prepared for that.


Of course, at the same time, Pauline was a complete idiot, played on all sides (both her own and by her enemies) for various political agendas. Her ill-advised sound bites (such as the “print more money” phrase) showed a wonderful ineptitude that the media, with it’s own political agenda, adored. But of course, I’m not telling you anything about Pauline that you don’t already know.


Let’s face it, the idea of apartheid in Australia is not new [4,5]. The word was bandied about when Pauline was rocking the political boat (though eventually only she fell and drowned). Australia is becoming a country that sees no problem in legislating different rules for different people. There is no sense that every person should be treated equally. Certainly the sheer fact there IS debate about banning booze to blacks and mandatory sentencing in the NT is evidence that a large amount of Australians see no problem with this. These are the same people who elected the current Government, and who I once thought as quite rational and sane.


In his draft preamble, Howard gave one nod to equality, in that Australian law should preserve and protect “Australians in an equal dignity”. This is a far cry from saying all Australians are equal. And it is becoming increasingly obvious that not all Australians are. And I am beginning to doubt if he believes that all “men” are created equal; certainly his support for Ruddock, his “sale” of immigrants to Nauru speaks volumes of this.


Whatever happened to the image of Australians as “lending a hand”? I don’t know, but I’m sure it’s not going to make a reappearance any time soon.


[1] cnn, [2] gov, (3)smh, [4] theage, [5] webusers





PRESS RELEASE: Embargo – VOW and WEF: A Distinction


PRESS RELEASE EMBARGO not for release before 12.00 hours GMT on 22 January



The World Economic Forum will hold its Annual Meeting from 31 January to 4 February 2002, in New York. We wish the meeting success. Especially after the tragedy of September the Eleventh, we wish peace, prosperity and progress to New York. The issues to be discussed are important and potentially wide-ranging. Those introducing each topic are distinguished. What then is Victory Over Want (VOW) proposing that WEF is not?


What is the World Economic Forum?


The WEF’s official website tells us that the Forum is “funded by the contributions of 1,000 of the world’s foremost corporations, the Forum acts in the spirit of entrepreneurship in the global public interest to further economic growth and social progress”.


“The Forum serves its members and society by creating partnerships between and among business, political, intellectual and other leaders of society to define, discuss and advance key issues on the global agenda.”The Annual Meeting brings together “1,000 top business leaders, 250 political leaders, 250 foremost academic experts in every domain, including many Nobel Prize winners, and some 250 media leaders…to shape the global agenda. Together, they address the key economic, political and societal issues in a forward-looking action-oriented way.”


“Discussions are held at the highest level among participants who belong to the same community of top decision-makers, fostering a unique club atmosphere which is very conducive to a forward-looking approach in addressing key issues of global relevance or initiating new business contacts.”


“In the context of the Annual Meeting, a number of constituent groups meet privately, among them the 13 existing governors groups comprised of the top executives of the most important companies in key sectors of the world’s economy.The interaction among members of these different groups allows them to share perspectives and discuss issues of global relevance affecting their activities and their outlook.”


“The club atmosphere which prevails during the Annual Meeting creates the most propitious environment for experience-sharing among participants for business networking and for the acquisition of first-hand information on the latest trends in business, management, culture, economic and political domains. The Forum believes that progress can best be achieved when governments and business can freely and productively discuss challenges and work together to mold solutions.”


“The unique atmosphere of the Annual Meeting that the media captured in the expression “Esprit de Davos” contributes to the creation of opportunities for literally thousands of private discussions, in addition to the official sessions where Foundation Members, Constituents and other participants share information for pursuing business opportunities, progressing on international relations, scoring breakthroughs in major socio-political processes and forging global partnerships and alliances.”




In other words, the World Economic Forum, set up and managed during the thirty years in which the complexity of the world economy has intensified along with its instability, allows the great of business and government to meet in “a unique club atmosphere…to define, discuss and advance key issues on the global agenda.” There is no place at the Forum for the ordinary citizen. The man in the street is kept on the street. The New York Police Force is said to be mustering 40,000 men to keep dissenters and protesters away from the Waldorf Astoria Hotel in which the Forum will “define, discuss and advance” their own proposals for the world in which the rest of our planet’s six billion people will live.


The WEF has the respectability of age and the blessing of the corporate establishment.The world leaders and experts who have prepared essays and received invitations to attend may be unlikely to offer embarrassing departures from mainstream economics orthodoxies – or from political and social orthodoxies either.


At the same time, some gentle hesitations are being expressed. Fan Gang, Director of the National Economic Research Institute of the China Reform Foundation, says in his essay that, “Ironically, more attention today seems to be paid to the fragility of developed countries and large multinationals. But think of the developing countries and small firms struggling in the shadow of multinationals. The real solution to todays fragility lies in the reduction of international disparities and fragility of poor nations. Reducing the poverty and fragility of the developing world must be pursued as a global public good, which is in short provision. Otherwise, the world will be more fragile and globalization will simply lead to more conflicts.”

We have yet to see how the discussions will go, but the expectation must be that, despite Fan Gang, the Forum will attempt to put as shiny a gloss as it can on a world attentive to the interests of the great international corporations and their compliant governments.


What is Victory Over Want (VOW)?


First, VOW says we have interwoven problems of threatening worldwide depression and long-term worldwide need.


Second, it says that governments and international agencies have not shown a capacity to act – or even to listen properly to voices of unhappiness and dissent.


Third, it says we need a fresh start, fresh thinking, a fresh determination to handle our problems with vigour and vision.


Fourth, VOW says we should take the democratic course and bring together the “sovereign people” of all continents, all races, all religious and other faiths and beliefs, secular and non-secular, to tackle in common the economic, social and, ultimately, political problems we all share.


Fifth, we have postulated that investment is what leads to higher productivity and production and gives us the income and wealth to abolish want from the face of the earth.


Sixth, at this time, private investment is faltering, with all three of the world’s most powerful economies in recession, so we must call on public investment to fight the economic downturn that threatens all of us, to head for long-term victory over want and, in so doing, to stimulate, reinvigorate and strengthen private investment everywhere.


Seventh, VOW is no pipe-dream, it is doable, it is necessary, we have the money, the skills, the management to do it – provided we have the will and the courage to act, to act together and to act now.


Eighth and last, we have proposed a VOW process – repeat, PROCESS – which will gather people together from everywhere in preparatory work and Commissions, to report to a World Conference for decisions leading to a Marshall-Plan-type assault on want, which will bring us a better, fairer, more peaceful world, in which we can enjoy the achievements man has already made and can look towards the future with confidence and in much more security.


This is a program for worldwide and fundamental peaceful change. We can do it. Let’s act to realise it, starting now, starting with us.




Let us elaborate on those points a little. VOW is receptive to all ideas, including those of the various estabishments, the big international corporations and the huge financial houses.


However, VOW is receptive also – and particularly – to the voices and the content of dissent.


VOW provides a forum in which new ideas can be set alongside the old, fresh ideas can be tested against those to which time has perhaps not been kind.


VOW provides a forum into which the dissenters in the streets can be brought into the councils of the policymakers around the world. At least, they must be heard and they must have a worthy stage from which to make themselves heard.


VOW seeks practical ways to achieve victory over want – ways to be put forward largely by the needy themselves, ways in which the needy can use their own energies and skills to lift themselves to higher levels of living, ways in which the rich can both help their poorer brethren and help themselves at the same time to greater prosperity and more security.


VOW seeks to mobilise and utilise human skills and energies. It abhors the current waste of these resources in unemployment and underemployment, in ignorance that education can banish, in poor health that basic medical services can remedy. It deplores homelessness and poor housing that a mobilisation of effort can correct. It wants to fill a glass – and more – with the clean water that more than a billion people have never before been able to drink.


This is not some wild, unattainable vision. It can be done. We all know it can be done. President Clinton confirmed to us just three weeks ago that the United States can easily carry its share of the “burden” – which is, he said, no more than the cost of the “cheap war” in Afghanistan. We don’t do it – we don’t do what we can easily do – only because we manage our affairs badly and/or we have less enlightened purposes to pursue. We let the “bottom line” obscure the view from the mountain-top.Victory over want can be won with benefit to all, within a plural, democratic, free-enterprise system.


It can give reinforcement to that system – and to its persistence and security – to an extent not available by any other means. Is there some wand we have discovered that we have only to wave to realise these marvels? No, there is no wand that we know of; but we do know what sound and sensible economic policies and real investment can achieve.


In recent years, public investment has fallen from grace, though much more in some countries than in others. Balancing budgets has become an obsession. The goal is always to have smaller government, less spending, lower taxes.

Fine so long as it lasts. But what happens when new schools aren’t built and old ones aren’t repaired and re-equipped? What happens when hospitals aren’t built and the trains don’t run – or run into each other? Who pays the unemployed – there are more than 4 million in Germany right now – when the investment hasn’t been made that would use their valuable energies and skills? What happens when the bottom line becomes an abyss into which our hopes for our economy, our society, our culture, our whole destiny might fall?


Investment over the centuries has endowed us with the great societies we have today. Investment enables construction and production today and necessary support to private investment at all times. If aggregate – public and private – investment is high, productivity will leap ahead, production will flourish, wants will be met. This public investment must be both national and international – not the self-serving financial quackery of some of our international financial institutions but solid public investment in infrastructure for transport and communications, education and health, the environment, housing, clean water, irrigation and hygienic waste-disposal. These are things that constitute the everyday needs and enhance the length and quality of life for all of us.

That is what VOW is all about.


We have already made VOW and its purposes known to the administrators of the World Economic Forum. We have not yet received a response. However, we would like to think that, after mature reflection in the Waldorf Astoria at the end of this month, what VOW is all about will turn out to be what WEF is all about too.


** *** **

The Overview of the Victory Over Want (VOW) can be found on the Internet at vow

For more information, please contact James Cumes* by e-mail The postal address for correspondence is VOW, Veithgasse 6, 1030 Vienna, Austria.


* The initiator is Dr James Cumes, former Australian Ambassador and High Commissioner, former First Assistant Secretary of the Economic and International Organisations Divisions of the Australian Ministry of Foreign Affairs, Permanent Representative to the United Nations and UNIDO Vienna, Governor on the Board of the International Atomic Energy Agency, Representative at United Nations and many other international gatherings around the world. Author of several books on economics, government, history and behavioural psychology/philosophy.

Decency, our way

I’m finding it hard to read the latest on our detention centres because I want to avoid feeling sick. Which is a trap: if people who oppose what we’re doing tune out, that’s the end of the struggle, and the end of the refugees’ hopes.


Webdiary contributor Brendan wrote today: “Notice the subtle racism and not so subtle vilification in the response of that hero and exemplar of the modern Liberal Party, Phillip Ruddock, to hunger strikes and lip sewing at Woomera: “Lip sewing is a practice unknown in our culture,” he said. “It’s something that offends the sensitivities of Australians. The protesters believe it might influence the way we might respond. It can’t and it won’t.” If it wasn’t a genuine quote, you might think it was something from the blackest of satires on contemporary Australia.”


A student interviewed me today for her honours thesis on John Howard’s now abandoned ministerial code of conduct. At the end, she asked whether I thought Ruddock really believed what he was saying?


I think he does. If he didn’t, someone with his history couldn’t live with himself. And if he didn’t, he wouldn’t be so compelling to the Australians who instinctively agree with his views, and whose instincts he so grotesquely reinforces.


I think the government is in a state of psychological siege. They complain that the boat people are trading on our decency. They have responded by losing it. This is impossible to accept, so they pretend we are still decent by saying that the boat people are not human, and therefore our decency is not engaged. So a lip sewing episode is portrayed as an insult to us – we who have human feelings, not an act of desperation by them – who have none. We are now seeing a leakage of this mindset to demonise those who support the refugees cause. Now we too are unAustralian, etc etc.


This leakage is also infecting the official attitude towards the fate of David Hicks. He too, has lost his rights as an Australian citizen, as have all the Taliban fighters captured during the war in Afghanistan. He is not one of us because what he did was not decent. It’s strange, isn’t it, that people fleeing the Taliban regime are detained in similar, disgusting conditions as those who fought for them! Just what are we proving to ourselves here? And how much further can this infection go before we realise we’re becoming no different to the enemy we just conquered?


Today, more reflections on Pauline Hanson’s legacy from Tim Dymond, Barry Rutherford, Peter Woodforde, John Passant, Malcolm Street and Paul Walter.


Tim Dymond in Perth


A `don’t speak ill of the politically dead’ style of political correctness seems to have infected commentary about Pauline Hanson’s retirement. Everybody has to mention how she `shook up the politicians’, `spoke for the unrepresented’ and `encouraged straight talking’ etc. Well in the spirit of straight talking – I’m glad she is gone because she is a racist! Yes that’s right, a R-A-C-I-S-T – RACIST!!


Do people remember what a racist is anymore? Someone who considers people’s ethnic background, skin colour, nationality to be their principle defining drawback! Hence the main issue with `Asian crime gangs’ is Asian-ness rather than crime; the `Aboriginal industry’ becomes more important than the ‘Rich White Man’s industry’ that runs Australia. We are now free to insult migrants for their supposed failure to measure up to some nebulous standard of `social cohesion’ that Anglo-Celtic Australians apparently achieve by simply being Anglo-Celtic. Don’t take my word for it – Pauline Hanson herself said it all in 1996 when she promised NOT to represent her Aboriginal constituents.


But the scandal of Hanson is the enormous confidence trick she pulled on her beloved ordinary Australians – aided and abetted by the media. She performed a great service for Australia’s elites – by which I mean the people who actually run the economy and political system, as opposed to academics and Amnesty International members. She encouraged people to believe that the poorest, most vulnerable members of the community are responsible for their problems – not the richest and most powerful.


All of the points Hanson made about Australia’s unrepresentative democracy and corrosive economic policies could have been made without rancour towards Aborigines and Asians. Her criticism of globalization was opportunistically taken up when her original message became stale.


There is nothing to be thankful for about her career. As her media cheer squad liked to say – Good riddance to bad rubbish!




Barry Rutherford


The Hanson legacy is an interesting one. I like the analogy created of the box of Redhead matches, once kept in many an Aussie pocket to light a cig, a rolli, a pipe or even the gas stove. One of my enduring memories of Melbourne in the 70s was the large redhead icon on a giant poster on one of the chimneys in Punt Road, Richmond. I feel that Hanson set fire to the political landscape especially in the bush. The burning of the greenery laid bare the raw basic emotion of people – especially in the bush – who had suffered in the early 90s from bank foreclosures, low commodity prices, the wool stockpile and high interest rates as those in the cities went high tech and talked about value adding.


Hanson short simplistic sentences became soothing to the ears of those tired with revolutionary change to the social and economic landscape as espoused by the republican Keating, who seemed only to listen to Mahler.


The sophistication of Keating became alien to thousands of country cockies as he strutted the south-east Asian stage talking intensely about the need to integrate with Asia. Banks were foreclosing on farms, interest rates were at record high levels and unemployment was high whilst Keating appeared to pander to the chardonnay or `fume-blanc’ artistic set of the eastern suburbs of Sydney.


Whilst Keating was collecting his clocks and Glover prints time was ticking for a bushfire to break out. Along came a redhead with a simple strike the bushfire was lit on the political landscape. National Party figures who cow-towed to the Liberal’s policies became some of her casualties.


Howard played clever politics and realised that some of his policies post-Keating had got the bush off side with his Government too, notably gun control. So Howard adopted some of the ideas of Hanson dressed up in a different wa, such as the treatment of asylum seekers and attacking ATSIC through the then Aboriginal Affairs minister John Herron.


Well the bushfire has been through. Italian suits, coiffure hair and a Gucci toothbrush are considered no longer necessary to perform well in politics. I suspect the shrubs and bushes will grow over Hanson’s legacy but I’m sure the charcoal remains will remain around for a long time.


MARGO: Your analogy reminds me of a bloke I met on the Hanson trail in 1998 at the Linville country races in western Queensland. I asked Anton Myck, cabinet maker, why he supported Pauline Hanson. “I call her the red head match you know, and I voted for her to set the country on fire.” Why did he want to torch Australia? “We’ve been in a stalemate for twenty years.”




Peter Woodforde in Melba, Canberra


After the Hanson brow-beating, a little bit of breast-beating Margo? It goes a long way, but no representative of the bourgeois media in Australia has come up with much in the way of a conclusion about why so many Australian battlers have steadfastly stayed clear of Howardism-Hansonism in droves that vastly outnumber the One Nation protest vote.


The bourgeois media, like the right wing media, love to infer endlessly that these people simply don’t exist or that any who do are just mugs for voting for the Australian Labor Party. They adore the term “rusted-on” as a pejorative of this kind of Left voter. Pushers of that kind of tosh have always found it perfectly acceptable to run a pair of contradictory lines and such cant was an essential plank in Howard’s election-winning platform. Howard himself used it as frequently as the soft centre, so with that kind of consensus, it must be true, mustn’t it?.


Yes, those battlers are mugs, but they are at least not wishful-thinking racists, or slothful wannabes with a drooling regard for market ideology. They have been long insulted by an army of commentators from the soft centre and from the right, but persist in voting for a large, extremely imperfect social democrat-democratic socialist coalition. They get duds like Con Sciacca, Graeme Campbell, Mark Latham, Ros Kelly, Michael Knight, Graham Richardson, David Bedall, Keith Wright, Brian Burke, John Reeves QC, John Dawkins, Andrew Theophanous and others ad nauseam, but still they persist. Why, Margo?


Because they also get a lot of good people with good policy objectives And once in a while, the battlers get lucky. Good people put in hard yards and phenomenon like Medicare start putting down roots, despite the hysteria of the hard Right. Honest toilers knock holes in the institutional tax scams of the wealthy. Political prisoners get let out of jail. People on lower incomes get a bite at better education for their kids.


The people who work for these things and vote for them are generally not listened to much by the ruling classes. One Hanson voter is worth a thousand “rusted-on” democratic socialists, after all. So you tell us, Margo – why are their views, their ways of life, their aspirations, so un-newsworthy, and so undervalued? The simple answer is that unlike almost all One Nation or Coalition voters, they are overwhelmingly dead-set battlers. There are plenty of middle-class Labor voters, Margo, but go and look at the booth-by-booth results for the last election. Then look at the relevant ABS statistics. Then join the bloody dots. Lots of poor people, lots of ALP votes. Even Lynton Crosby can work that one out.


Many low income Australians have little economic clout, but have enough nous not to fritter their small political capital for snake-oil. A Liberal Party member some time ago at a conference in Melbourne alluded to this with a complaint about policies for the type of people “who vote Labor anyway.”


Such voters were not and are not seduced by Hanson’s style, not “because it was the very antithesis of standard political discourse and rules of engagement” (what rot, Margo!), but for the same reasons that they also reject Howard, those cute li’l ol’ bucketloads of extinguished Nationals, the GST Democrats (how unfashionable it is now to speak ill of that new tax holiday for the rich) or such people as the Queensland Greens’ comic Drew Demidenko-Hutton and pals. None of these people ever gave a toss for low-income people who know the value of things like Medicare, a public health system, decent state schools and where it all comes from. Many soft centres don’t even understand those things, let alone support them, but like Howard, they will put in heaps of propaganda to pretend. Their efforts are lost on a vast number of Australians whose views don’t count, but who know ruling class bullshit when they see it.


As for believing that One Nation voters contain only a “hard-core five percent of hard-Right One Nation voters”, it may be comforting, but it is a little bit like believing in other hard-Right political myths. For example, in the ACT, Thatcherite conservative and would-be populist Kate Carnell draped a few scrubby “social-Left” tatters over herself to play fish-for-votes. She conned some soft-centres easily with this pap. Even when the wheels were falling off her Bjelke-like machine, her media/business fan club zealously kept intoning “dynamic” “good little manager” “compassionate” and even, God help us, “social-Left”. It got blatant. At the peak of Carnell’s success, a rotund local commentator was so full of hard-right gammon and bourgeois hubris that he referred to her ALP opponent as a “discarded blue singlet thrown in the back of a fire station.”


It wasn’t much in the end, but it got her over the line (thanks to a dodgy variable multi-member electorate system, Carnell was bumped into power and maintained by a gaggle of proto-Hansonite right-wingers, one of whom actually gained a ministry in her government – the others settled for very big cars). Unfortunately, when push comes to shove, right-wing populists, whether Bjelke (Hanson’s hero), Carnell or Hanson herself, vote for or impose hard right, battler-punishing policies and regimes. Spouting hypocrisy about the pros and cons of heroin-injecting room trials appears never to have delivered an injecting room in the ACT, but it allowed a hard right regime to slash public housing, blow up public health systems and implode public education.


There are many battlers who vote as Left as they practicably can. On very few occasions they vote Lefter than the ALP, but it’s infrequent. They frighten the soft centres and the hard Right with their patience. They are not into pie-in-the-sky, whether from the blandishments of Howardism-Hansonism or from the middle class Jeromian liberal-Fabianism. And despite their numbers, they don’t much suit the marketing demands of either the bourgeois media or the loony Right tabloid-talkback-TV agglomerate. But they persist and they will overcome.




John Passant


I think Hanson’s departure can be explained at a number of levels. The first point is that Hanson has departed, not Hansonism. So while it may be true to say that Howard attracted former Hanson voters, my understanding is that 500,000 still voted for her party in the last federal election. And Howard with his ecorat approach will not hold all the Hansonites forever. So the explanation that Howard captured the Hanson vote, while to some extent true, is too simplistic and needs elaboration.


Note too that the organisation has three parliamentarians in WA, a strong base from which to organise. Perhaps what we are witnessing is a political polishing of Hansonism and that meant getting rid of Hanson.


I’ve always thought that One Nation was an embryonic fascist organisation. By this I mean it had the capacity to develop in a fascist direction, not that it was fascist. Hanson was not covertly or overtly fascist. However the social background of the leadership and its appeal to particular sectors of society are alarmingly similar to the Nazis in the late 20s and early 30s last century.


Fascism is a middle class response to economic crisis. The petit bourgeois – small shop keepers, layers, real estate agents, managers and the like – feel caught between big business and big unions – i.e. between capital and labour. In their impotence they rage against both.


However as the economic crisis deepens the employing class sees in the fascists the battering ram to smash the organised sections of the working class – the trade unions and the parties of labour, be they social democratic or more left wing. This will enable the Nazis to produce more profit for the bosses by driving down wages and conditions. At the same time the fascists appeal to the less class conscious sections of the working class – the regional areas with low unionisation rates (and in Germany in 1930 and 1932, protestant areas) – by talking about making life better for them.


Once the crisis, expressing itself in Germany in a crisis of profitability, appears insoluble according to ordinary democratic means, the ruling class turns to the Nazis.


Now One Nation does attempt to appeal to the petit bourgeois. Its leader was the archetypal fish and chip owner. It also appeals to less class conscious workers with economic nonsense.


But while there are disaffected workers and middle class people by the millions out there, there is not as yet a crisis of profitability in Australia so severe that the ruling class needs to turn to One Nation to smash the ALP and the trade unions.


One Nation harnessed the disaffected middle class and some workers. But it cannot push past its present barrier (of around 5 to 10 per cent support.) The ruling class has no interest in the party.


It is thus a party of action when there is no action necessary. This frustration has expressed itself in Hanson’s case in her resignation. But the Party still exists and if the economic situation worsens there could be a resurgence in support for it, with the possibility, depending on the level of crisis, of support from the ruling class.


If so, I would think Hanson herself would come out of retirement.




Malcolm Street in Fraser, Canberra


I was interested in the interview you did last week on Canberra ABC radio regarding the fallout from the Hanson phenomenon. I recalled a political science theory some time ago that one function of third parties in Australian politics is to act as “transition parties”, which ease the movement of voters from one side of politics to the other. Thus the DLP eased the movement of Labour voters to the Coalition, the Democrats the opposite, and One Nation would be another DLP.


A couple of observations I’d like to make on specific points you raised in the broadcast:


1. The likelihood of a brain drain


You said that one problem with fighting back was that those upset about this election result could move overseas while that option was not open to One Nation supporters. Leaving Oz is by no means hypothetical; the week before the election we were talking to some friends (he an officer in the armed forces, she a lawyer) about whether we should stay here if Howard got back in on his platform and he said, “That’s interesting, we’ve had three other conversations [with other friends] like that this week…”! I’d argue that the critical differences are not in money but in motivation and available destinations.


One Nation was not just a party for battlers. Pauline herself was a business owner who had a property outside town, a son at Ipswich Grammar and, I understand, a Mercedes. The two David’s weren’t poor either… The party was able to get some very sharp operators on board; its many supporters included some of the dispossessed but there were plenty across the social spectrum who were only too happy to have their prejudices given a public imprimatur.


Of course there is greater motivation to stay at the One Nation end of the spectrum: if you don’t think Australia is sufficiently racist or far to the Right where do you go? Of the nations that can provide a Western standard of living, only the US appears to rival us for reactionary politics and international bloody-mindedness, and it ain’t an easy nation to get into. Plus we don’t have many migrants from the US who could easily go back there. So you’re stuck here if you want to make the last great stand for the white race (which I understand is a motivation of a proportion of Perth’s far-from-poor expatriate British and South African communities).


Look at it from the global small-l liberal perspective, and things are quite different. Australia, always geographically isolated, is now ideologically isolated on a fringe right-wing limb, where just about anywhere in the developed world except the US offers more liberal social policies. The major opposition party isn’t interested in contesting this other than at the margins so there’s no hope via the political system, unlike the situation in Austria or Denmark.


We are at risk of becoming a new international pariah, which makes a purely Australian career path less desirable. In addition, it is easier to get into the EU or Canada for work (and much easier in the case of NZ) than into the US, and we have many migrants who have ancestral privileges making it easier to go there (eg patrial status for those with British or Irish grandparents). The fact that such people have a more global perspective anyway will also make them more likely to look outside Australia.


That said, there are some very practical forces stopping people from going. Take my partner and I. Firstly, all three of my step-children and step-grandchildren live close by in Canberra. Secondly, we are in a defacto relationship which is not recognised by UK law, so despite my partner being British I would not be able to work in the EU without a special permit (as I had from 1980 to 1982) as my last ancestor born in the UK (and for that matter outside Australia) was three generations ago and I thus can’t get patrial status. Thirdly, the dirty little secret of Howard’s economic miracle is that its price has been the $A going through the floor. My partner, who recently retired, is on a pension that is very comfortable for Australia, but would be a pittance virtually everywhere else. We came to the conclusion that New Zealand was the only practical alternative if we did move.


As an aside, given that it has been through both a period of institutionalised boorishness and isolationism (Muldoon) and a lunatic free-market experiment (Rogernomics enhanced by the subsequent National government) New Zealand has already undergone what we are experiencing in even more extreme forms over a longer period, and could well evolve into a pointer to a possible means of recovery and healing here. NZ could become a “local” haven for disaffected liberal Australians the way South Australia was in the 60’s under Dunstan.


2. Undoing what has been done “since the 70s”


In the radio broadcast and at other times you have indicated that the Howard government has undone the legacy of the Whitlam years. I’m afraid it’s far worse than that…


Whitlam’s inheritance is long gone under this government; it is *Chifley’s* record that is now being systematically destroyed. That extraordinary government in its all too short term set the trajectory for Australia for fifty years; massive immigration including refugees from the war, breaking the bounds of an Anglo-Celtic ethnic structure, an independent, activist role in international politics and the UN out of all proportion to our size, expansion of higher education and a major government role in providing the infrastructure of this widely-dispersed nation. All with a conservative, fearful and isolated nation exhausted from the war.


These trends continued under Menzies, despite his Anglophilia, and in some areas were even enhanced (remember the Colombo Plan, a pioneering part of Australian interaction with the region?). The arrival of Asian migrants was no more a change than that of the southern Europeans in the 1950s, and under Malcolm Fraser our attitude to refugees and international affairs remained a positive and humane one, a stance that was continued in the Hawke-Keating years.


Under Howard we have instead seen a deliberate scare campaign against refugees (aka asylum seekers) and anyone of an unusual ethnicity, a new isolationism and proudly acting as Uncle Sam’s “deputy sheriff”, a continued assault on public education at all levels and a decimation of our tertiary sector, and a “hands-off” policy to national development.


We are not back in the fifties, we are back in the 30s, the days of Bruce and Lyons…


Hands off the economy whatever the suffering that is occurring, with due obeisance to our imperial masters (US instead of UK) so they will help us militarily if we get into trouble (just like the UK did in World War II…).


Back to being a colony.




Paul Walter in Adelaide


I got round to reading your “ripping yarn” come Kafkaesque hallucination of a book over the weekend.. I am glad I haven’t read it earlier OR left the reading of it until any later. It’s like getting the other half of a torn road map; so I am now getting a well-rounded picture in my mind as I remember back to what seems such an eternity ago, and personal responses to incidents I can recall from that time.


I remembered thinking the youngsters were risking making a martyr of her, for instance. I remembered the “”I don’t like it”, the “please explain”and the other fun poked at her.(Well, she wanted to play grown-up games; she was inevitably going to be left to “cop it sweet” from battalions of well educated and well-rounded minds outside of her deep-north comfort zone.


You did well to remind readers of the hard grind of a not-necessarily-privileged background. I remembered becoming nauseated eventually with the constant carping about her vocation as a fish-and chip shop owner-worker and the infantile snotty snobbery that that sort of commenting revealed. So she worked for a living in the real world in a hot sweaty fish and chip shop! Would anyone who has ever had to work hard or battle a bit have found that “funny”?


Yes, she deserved to be “fronted”; but that wasn’t the way to “front” her, nor was personal abuse to her face. Some of the other characters in your book later revealed how the use of much more subtle tactics could really expose her real weakness to the light of day. I remembered thinking, for example, about her squawking in the Queensland court about being “hurt” by the rough satirising she was receiving and thinking she had a cheek after some of the brutal stuff her and her people had dished out to young people and those perpetual blue-collar battlers, the Aborigines.


I found myself by degrees admiring, astonished and appalled at her capacity to absorb punishment, her sheer ignorance of historical fact and her apparent lack of any self-reflexivity.


Very ugly was the feud between you and “Mouldfield” – a disturbing glance into what constituted the locus for a frightening aspect of the wider collective Australian (unconscious) personalty as represented through him. Nasty!


Frightening also when an onlooker realises that Oldfield is there as representative of Howard, the Media barons and the anonymous collective of the controlling classes.I recall reading French philosopher Roland Barthe’s comment to the effect that…”The bourgeoisie always obscures itself”… in “Mythologies”, a work that was trying to grasp how the crazy governing impulses of life in a “modern” society are incessantly reproduced; in effect a conceptualising of HOW the mechanism of ideology interactive with socialisation in effect REPRODUCES US!


And maybe Hanson DID prove capable of learning, in some respects, from events, too. Coming from way out of the blue she single-handedly almost brought about the downfall of the entire Howard apparatus last year.The casualty list she inflicted on orthodox political careers alone is awesome, and but for the taking-over of outside events there could well and truly have been a real, if indirect,”Revenge of the Mainstream” , with a vengeance, against the now entrenched economic rationalist regimes that have control here in our time.


But Hanson is now “Damned with Faint Praise”…


Her political end shows the difference between the spontaneous rebellion of

a Pugachev or, say, a William Wallace or Boadiccea nature, and the hope of success in challenging the paradigm forearmed with coherently reasoned facts and ideas and presentable alternatives offering a vision and choice related to the present moving into the future, rather than just passion. And I personally believe the REAL threats to Global and Australian democracy are as well and truly entrenched as ever.

Hanson’s legacy

Despite myself, I’m still thinking about the Hanson legacy, an exercise made more pointed by the news that now welfare recipients will be “profiled’ to detect their cheating hearts, as are potential drugs importers at airports.


Here’s something I wrote for the Herald today, then the thoughts of Les Bursill, Richard Goodwin, Suresh Rajan and WQ Ming.




Many Australians hate Pauline Hanson to their very core. To them, she’s the dark underbelly of our identity, the bit they’d thought was buried forever until she hit them in the face with it.


Yet upon her retirement six years after voters in the safe Labor blue collar seat of Oxley in Ipswich swept her into parliament with the biggest swing in the nation, who of these is dancing in the streets with a “Hey Ho, the Witch is dead”?


There is no relief among those who hate her for her attitudes to race, to cultural difference, to pluralism, to welfare and, I suspect, there may even be unexpected feelings of regret. Better for her to speak those views, perhaps, than for them to be swallowed whole by a major party – with the power, money and the manipulation skills she never had – the one which won back her people and the federal election? Better her representing those views than a freaked-out, policy-constipated Labor Party now also busily moving to the conservative right on social policy?


For these Australians, there is also the shocking recognition that they have replaced the Hansonites as the new oppressed minority – demonised, labelled un-Australian, stereotyped, damned as whingers, and, most strikingly, disenfranchised by the major parties. The Hansonites got their way. We turned the boats back, just as Hanson wanted. We gave refugees who applied onshore three year temporary visas, not permanent residency, an even tougher policy than that of Hanson, who called for five year visas in 1998. We vilified international human rights norms which didn’t suit us. What a journey! What a phenomenon! And what a `conversation’ (read screaming match) she’s inspired over our national identity. Now anything goes.


It’s a more honest place, Australia, thanks to Pauline Hanson. Her victims are Australia’s `minorities” who now not only sense resentment and disapproval but are told all about it, verbally and sometimes physically. It’s a meaner place for the underclass, too, but at least the downward envy prejudices of some once forgotten people are being indulged. I hope they feel better for it.


So let’s dismiss the glib, self-serving denial of Hanson’s influence from people like John Howard’s former chief adviser Grahame Morris, who said of Hanson on Monday night: “She was a media creation and at one stage there everyone thought she had every blinking answer. Well, it was idiotic. She was one voice with no answers and essentially just a spoiler and a whinger.”


First, Hanson was a creation of a significant group of Australians who reacted with glee to her maiden speech. The media played catch-up with public opinion. It also put enormous resources into exposing the flaws of One Nation’s structure and the excesses of her support base.


True, the media was seduced by Hanson’s style, because it was the very antithesis of standard political discourse and rules of engagement. She didn’t speak in code. She opened herself up to scrutiny from any Australian who chose to do so, through public meetings open to all around the country. She did not stage manage events, creating the excitment of never knowing what would happen next. She was political reality TV, and she rated.

The Hanson phenomenon exposed chronic failures in media practice, particularly its increasing tendency to turn its back on the public to play insider games with the powerful. The Hanson shock has triggered many attempts to reconnect with the public.


Second, leaving aside the hard-core five percent of hard-right One Nation voters, the rest, in general, did not believe Hanson had the answers. They believed she asked the right questions – questions they’d asked and which had never been addressed in language they could comprehend, let alone answered. She was a means to scream.


Hanson was a peculiarly Australian version of ultra-nationalist populism – female, amateur, exotic. Her visceral appeal, the sense she engendered that she had the guts to stand up to the big boys and take them on, inspired many Australians in the regions and the bush to rust-off from their traditional vote, particularly for the Nationals.


Once that happened, Victorian country voters voted Labor in 1999 to oust Jeff Kennett, and NSW regional voters increasingly turned to rural independents in the State election the same year. The reason was simple – the Hanson scream brought big dividends.


After the 1998 federal election and the Victorian election, money flowed like honey to the bush. John Anderson admitted we were “two nations” and called a rural summit. Telecommunications services, doctors and lots else was rushed to the bush. In academe, regional politics and policy landed on course lists for the first time. Compensation packages for deregulated rural industries burgeoned. Most importantly the government, Labor, and even the Productivity Commission admitted that competition policy needed overhaul to take into account more elements of the “public interest” than the circular definition that more competition was by definition in the public interest.


Hanson proved how moribund the economic left had become. While the left around the world lobbied hard to expose the secret Multilateral Agreement on Investment (MAI) being brokered among OECD countries to give multinationals the right to compensation if their bottom lines were affected by new environment, health or labour laws, it was Hanson who exposed the plan in Australia.


At the time, a staffer to a senior Liberal minister confided that on hearing Hanson’s MAI speech, she asked her department if it had ramifications for his portfolio. The department knew nothing – everything was handled secretly in Treasury, and Treasury said everything was fine. The light of day saw MAI negotiations collapse.


I relate this anecdote to show how those whingeing questions of Hanson’s served to open up an economic debate which had become – by bipartisan consensus – closed, self-referential, deeply ignorant of the costs of its policies in human terms, and unforgiveably arrogant.


The tragedy of the Hanson phenomenon is not that it existed, but that neither the politicians or the media responded constructively to its cultural challenge, to genuinely discuss answers to pressing problems unforseen by the transformers, like the continuing disintegration of many Aboriginal communities and the rising tensions in big cities against new migrants. Her threat to their, and our, certainties were too big, her challenges to their, and our, power, too disturbing. So we got appeasement from Howard and many Nationals, search and destroy by Jeff Kennett and the liberal media.

The result: a violent pendulum swing from the transformative vision of our identity begun in the 1970s to regression to an old vision founded on fear and exclusion. Now, the Hanson/Howard combo having won the culture wars, we get search and destroy of the liberal ideal and its proponents amid ugly triumphalism and the blanket replacement of one political correctness with another. What a shame.

Hanson retires with an Australia just as divided as when she burst upon us, only now the wounds are open, the divides acknowledged. We know each other better than we did before she hit the public stage, and as she leaves it, many more Australians are actively taking part in debate about who we are and what we stand for. This is the unfinished legacy of the redhead from Ipswich.




Les Bursill


I am at the end of my tether. We are becoming the “hard men” of the world (refugees and David Hicks’ denial of rights) and now Amanda Vanstone (that’s Mandy Vandalstone) is profiling welfare cheats. Isn’t that convicting people of crimes they may commit? Perhaps we should profile pollies and anyone who fits the mold should be put into a humane detention camp in Timbuktu.


I am only grateful that history will record these buffoons and their activities and people like Little Johnny, Ruddock and Vandalstone will go into the history books for what they are. Yes I know they are reducing the value of history and other social studies, but I am sure some of us will still remember.




Richard Goodwin


Let’s not write her off just because she’s resigned from the party. Remember how many times John Howard has been written off, including before the last election? How will she be remembered?


For me, as someone who broke open the cosy arrangement between the major parties to not discuss issues which were of importance to many Australians, eg immigration. Neither party could ignore the fact that members of the left and right were being ignored by the Lib/Labs.


I think it was important that she was a woman, because it has partially dented the boys club/male-oriented parliamentary system. Neither party has come to terms with the challenges she has thrown up.


I didn’t always agree with what she said. and she didn’t always articulate the things she was criticised for (especially in the overseas press), but she had the guts to say what was on her mind. If the political hacks in the established parties were more prepared to do the same, we might not have another x years with John Howard and a pathetic opposition who appear to be incapable of challenging the government.




Suresh Rajan in Perth


The legacy that Pauline leaves is not, as (Western Australian One Nation MP) John Fischer would have us believe, akin to that of Margaret Thatcher, but rather one of a person who evoked the basest and most racist instincts in a number of her supporters.


The remainder of her supporters were enamoured by the glib and baseless motherhood statements that are so easy to dole out whilst not in government and hence are not accountable for delivery of promises.


The fear that I, and others in like minded mode, now have is that the power base of One Nation now shifts to “Lil ole redneck WA”, the base of such intellectual pygmies as Graeme Campbell and Frank Hough.


But let’s return to Pauline. Whatever one can say about her asinine and baseless political and economic policies, one has to have a modicum of respect for the fact that she did try and stick it out over a number of elections and through various trials and tribulations that she has endured. I don’t doubt that, as Paul Keating used to describe it, she will return, “like a dog to its own vomit”.


W Q Ming in Gosford, NSW


Peter Brain in Beyond Hanson suggests representative democracy is a good thing which we don’t have. Nor can we, since a nation that grows up with no political education, whose wages, superannuation, medical insurance are all largely determined by government fiat, and who have no way of controlling the masters of the state, are political `cows’- and cannot be represented in any useful sense.


Oz Labor was thrown onto the dust-bin in the 80s, and Pauline was the only pollie to believe a career could be made from speaking for them. She was too dim and ignorant to succeed personally. She was just a twitch of a political corpse, the last gasp of the blue singlet ozzie.

Fundamental inexperience

Looking back, Pauline Hanson has been the most influential person on my work since I became a journalist in 1987.


After following her in the 1998 election, I examined all my assumptions and began changing my views on reporting politics and the optimum relationship between journalists and readers.


This morning in the Australian, Jeff Kennett – once of Hanson’s most persistent and outspoken critics – gave an honest political assessment of her career. He said:


“She was a meteorite that came from nowhere, burst on to the scene and fell to earth. She had a unique opportunity, which she failed to capitalise on through fundamental inexperience and being surrounded by a few people whose interests were not in her interests.”


I agree with Kennett, except that I wonder whether a professional, experienced player could have possibly risen to such heights of popularity as Hanson. Perhaps the Australian personification of far-right populism had to be an amateur to be so appealing.


But there is another big question here, apart from Hanson’s performance. Could her challenge have been responded to differently, in a way which averted the seismic switch from one vision of Australia to its opposite.


After the 1998 campaign, I hoped we would see her defeat as a timely warning – a get-out-of-jail-free card. I hoped we would seriously address the economic and social challenges posed by her. In my book on the campaign, I wrote:


After the 1996 election Howard, who had subliminally appealed to the new underclass and its resentments with his `For all of us’ motto and pledge not to govern for `minorities’, wanted a hands-off approach to Hanson. Let her have her say in the name of free speech, but don’t respond directly.



The other Liberal camp, with its base in Victoria, saw the seeds of appeasement in Howard’s approach. They saw One Nation as a monster of racism and economic isolationism, a fascist organisation that would only grow stronger if appeased. Hanson should be crushed immediately, they believed, by condemnation in the strongest terms by the nation’s leaders, and by the unremitting exposure of her party’s structural flaws. Victorian Premier Jeff Kennett was the leading proponent of the get-out-there-and-take-her-on school of thought, and planned a visit to Blair to argue his case on the ground.


The third way, constructive engagement – an attempt to understand this incredible and potentially self-destructive scream from the politically apathetic – was never really tried. So the barriers went higher.”


It seems so long ago now that Howard, mightily relieved that Hanson’s campaign had been so poor and that he’d scramble across the line with a minority of two-party preferred votes, pledged to aim high and to heal. “I also want to commit myself very genuinely to the cause of true reconciliation with the Aboriginal people by the Centenary of Federation.” A year later, this wasn’t even on his must-do list for 2001. And then, he simply embraced Hanson’s social populism. He took her over.


The downside for the ideological interests of his core constituency, however, has been substantial. He’s had to create a compensation scheme for workers who’ve lost their entitlements – even, in the case of One Tel, when they’d traded away their award rights for individual contracts. He’s had to knock back the Shell takeover of Woodside and make noises about toning down competition policy. There’s been a downside for politicians too – he also had to change the politicians super scheme to knock off its worst excesses.


It’s time for progressives to get back to tin tacks. It’s time to admit profound errors of judgement in responding to Hanson, based on foolish denial of core elements of the Australian psyche. Hanson, a strong, likeable, stubborn, polite woman, is like many Australians – fundamentally inexperienced and thus susceptible to snake oil salesmen. Howard has seduced them for now. When they realise that, some may be prepared to listen to some from the old enemy, the now defeated `elites”, if they get their act together.




Last night I looked over letters from readers of my book written two years ago, and three extracts follow. The signs were there, and they were obvious. The abject failure of the political class and the media to see them and engage with them and do something about it must never happen again. The consequences of denial, as we’ve found out, are diabolical.




A judge wrote:


My background and lifestyle are very middle class. However, my work as a judge of the Family Court of Australia takes me to many parts of the country including capital cities and many regional centres. I see the alienation and feelings of hopelessness which are rife in many parts of the major cities and in most if not all regional and rural communities in Australia. I do not think that the bulk of the Australian community, including a large proportion of those who govern us, have any real appreciation of how much child abuse, domestic violence, abuse of alcohol and other drugs, together with many other forms of dysfunctional behaviour, are a constant feature of the society’s landscape.


It is easy to understand how Hansonism flourished. There was hope where none appeared to exist.




An academic lawyer wrote:


I have also been struggling with the One Nation phenomenon – perhaps because I come from a mining family in Tasmania, some of whom are strong supporters. I have found it hard to reconcile this with the obvious negative elements of One Nation, particularly its racism. Yet, I have also been repelled by the obvious class elements in many of the attacks on One Nation itself. I also recognise the feelings of alienation and despair felt by many, such as my relatives, who have seen their jobs disappear and have felt abandoned by the political process.


My own response has been to work on issues such as voter alienation and means of allowing greater involvement in and ownership of the political latest area of exploration is a modest bill of rights…




A chaplain at a private high school wrote:


Discontent can so easily be ridden by fascism – so I’m very glad One Nation fizzed – yet, the last few chapters documenting the failure of the movement were truly tragic. You vividly painted the crying sadness of the `Common Man’ and simple political idealism being crushed by egomania, ignorance, poor planning and financing, and the slick marketing and image manipulation of its competitors.


But this book raises so many fundamental questions about our political processes, our political visions, and our political culture that I’m a bit disappointed that you were happy to just raise these questions rather than go very far in the direction of trying to tackle them. Maybe, as a reporter, you don’t see paradigm analysis as part of your brief.


But I put it to you that just as Hanson could connect with the grassroots of rural discontent because she was not a specialist, so a reporter can possibly ask the fundamental questions which the political scientists can’t even frame.


Scientists deal in laws prescribed by their theoretical frameworks, commentators deal in trends based on what has happened in the recent past when the system is basically in equilibrium and the power brokers are clearly known – but you, as a humanly engaged reporter, have seen the mystic writing on the wall, you have seen the possibility of the unprecedented, you have touched the raw human nerve endings of the politically alienated, you have felt the limits of our current political methodologies and theoretical orthodoxies.


Let me poke the issues that arose to me from reading your book.


Off the Rails points out to me that Athenian style democracy was never designed to function on a larger scale than about 500 citizens, it cannot in fact function on a larger scale than that, it has never delivered power to the Common Man, neither can it. Now, as Churchill implied, modern liberal democracy is the `least worst form of government’, and for that reason it has an awful lot going for it; but viewing democracy as an ideology that empowers the Common Man is a recipe for nothing other than horrible disillusionment.


There are two reasons for this. Firstly, the old corruption and power equation comes into force. Popular power often attracts ruthless, unscrupulous, pragmatic egoists – like Oldfield – who have a deep affinity with manipulation, and a horrible instinct for riding a crowd’s discontent, even if that manipulation and crowd discontent is invariably self (and other) destructive.


Secondly, our type of “democratic” government has nothing in reality to do with representing the Common Man. This is simply a problem of human scale. What makes for stable and humane democracy is leadership which is worthy of the respect of the Common Man, not the actual participation of the Common Man.


Because our leaders have so blatantly focussed their energies on doing pragmatically pleasing deals with the power elites at the expense of integrity and at the expense of the interests of the less fortunate common people, the ability to respect whomever our elections throw up is seriously damaged. This is the real story behind the Hanson phenomena: the betrayal of the unspoken social contract between the people and their leadership. Poor old Pauline’s fruity, ignorant, and bigoted faults were deliciously seized upon as scape goats to divert attention away from the cause of her rise.


I’m glad the racist, fruity, ignorant and bigoted instincts of alienated rural Australia did not gain the opportunity to solidify into a serious fascist movement – yet, the idealism, initiative, courage and grass-roots connectedness of Pauline gained almost no comment from any serious critical quarter – apart from you. Thank you very much for not demonising her, but for painting her in the full range of weird, interesting, ugly and beautiful colours that she presented. Yet, it worries me that apart from you I have heard only blind love or blind hatred towards her.


I am a high school chaplain and I see a major political sea change on the horizon in our youth. Ignorant of left/right allegiances, unimpressed with non-existential ideology and yet deeply idealistic, thoughtful and genuinely trouble by ethical issues, this rising generation is quite different.


They were not born in the post-war boom; many of them are reactionaries away from the narcissism, materialism, consumerism, career-fixated identity and hedonism of their parents; they are concerned about relationships; they are not just tolerant but genuinely liberal; and at the moment they are remarkably uninterested in politics.


But, in the past two years, we have seen Hanson and Timor radically shake the validity of US foreign policy reliance and the politics of pure economic mumbo jumbo. Our leadership delivers policy which is (with occasional exceptions) morally gutless, lacking in genuine creative initiative and playing sure-fire real politics under the guise of `concern’ and `reason’ whenever it can. And this is more the fault of our party machinations than of the personal characteristics of particular politicians.


But this leaves not only the rural, but many of our young, deeply politically empty. This kind of vacuum cannot last. Fortunately Hanson did not fill it – but filled it must be.


If our current leaders and gatekeepers can recognise this, then there is real hope. Continue to ignore it and either a genuine alternative will arise, or fascism will arise. And unfortunately – as Oldfield and the far right demonstrate – fascism is more likely if a new political movement has to emerge.




Now your thoughts after the redhead bowed out. Sarah Capper sent me this one, from Bruce, a talkback caller in Hobart this morning. “Pauline represented middle Australia. She wasn’t a bleeding heart academic elite lawyer minority who seems to run the place”. He believes Hanson’s legacy will be “to make people think about what is happening to Australia with immigration … we had a wonderful place here and it was tending to be destroyed”.


Yama Farid in Sydney


This is my (very) brief take on her legacy. Does Australia miss Ms Hanson? NO, because we have John Howard, the intellectual Hansonites, alive and kicking in our capital city, Canberra.


Paul Walter


Many thanks for reproducing Peter Brain’s for your little scattered band of earnest enthusiastic students of politics – national and global (see Beyond Hanson). Many readers will be experiencing the same sense of nausea; angst-driven, as this reader; sitting here and thinking “Yes, I thought so”. Like sitting in a dentist’s chair and being told that yes, that pain you are experiencing IS a major toothache induced by and emanating from comprehensive tooth-decay! And a sinking feeling emanating from the confirmation.


It links with your comments about the terminal state of media and press here in Australia (see Cross media endgame); with reports emanating on the Internet concerning the frenzied fervent politico/economic fundamentalism, neo-liberal “theology” mixed with a warped form of self-justificatory “Christianity”, unrecognisable against the real thing, now moving from covert to open dominance in the US, and hence the world.


Then there is the profiling of the entity by people like Susan George and Fabrizio Sabelli (Faith and Credit :The World Bank’s Secular Empire, Westview press,1994), an excellent intro for people in grasping the implications of the other main aspect of the equation to the one dealt with in detail by Dr Brain, namely the extra or international relationship between very small national “fish” and very big sharks in a vast international macro-ocean of money, ideology, persuasion and naked power, that shows both the imperatives and impetus of late-capitalism over the last twenty years or so.


As Peter Brain’s argument explains…”in Australia monetary policy is largely run for the benefit of the finance sector and not in the national interest” Could it be other wise were it not to be in synchronous alignment with global (ie US) “theology” and practice.We have John Howard; the world has “Dubya” – who today dared to deny he had any prior knowledge of the Enron debacle, a U.S version of HIH breaking over there.


Like his Australian clones, Bush WOULD say such a thing as much out of sheer perversity as fear of shame, knowing full well that people would see through such a statement to grasp a sub-text that thumbs its nose at wider humanity and entrenches the self-justified and self-justifying prerogatives of the REAL elites.


No, Pauline, you were wrong; not in saying Australia and Australians were being “had”, but by who. The true”elites” in control are right-wing they are not necessarily all as evident as those visible in public life and they used you as a cat’s paw to achieve the further undermining of a society you also recognised, no matter how dimly, as maybe still having real worth. And you, out of sheer ignorance, misappropriated left-liberal critiques of society and devalued their true worth as surely as the National-Action types misappropriating of the “Southern Cross” flag and unwittingly devaluing ITS significance as a national icon.


The truth is Australia is a garden-snail of a political entity that was well and truly stomped down at some time during the previous decade. The only problem: is the only consolation left the final apportionment of blame?


Do we blame the foaming-at-the-mouth Howard Malemute that has caused such damage within the chicken-coop of Australian society in the last half-dozen years, or the previous Labor governments of the late eighties and early nineties whose inability to solve the contradictions created by their “reforms”, and eventual tardiness in the mid-nineties allowed for the Dreadful Unleashing of the self-absorbed calvinist Neo-liberal Brute in the first place (shepherded by its empty-headed “aspirational” minions)?


Or do we go further and recognise, along with Dr Brain, that we were for sometime directly in the path of a political, ideological and economic steamroller that would have been difficult even for visionary leadership to deal with, let alone the divided and inimical interests grappling for control of the spoils of defeat while it was looming.


Like the ancient Athenians, the Portuguese of the 16th century and the once-mighty Moghuls of India, perhaps we are just going to have to face up to the enormity of what we had and were almost inevitably were going to lose, even if somewhat unjustly so, as is occurring now.


The Australian people themselves (including this reader) have years of apathy, conceit and sloth to look back on and regret now that the inevitable is occurring, perhaps even a seeming-eternity. So, with twenty-twenty hindsight, we look upon the shambles now rapidly actualising at our feet and ponder what might have been.




In the light of Brain’s piece and Hanson’s demise, as an investor in the Platinum International Fund, I read the company’s description of what Enron did last night with more than usual interest. It’s the first account I’ve read that makes any sense, and it raises the question: in whose interests in privatisation of government utilities? You’ll find the report on pages 8 and 9 of Platinum’s quarterly report, enron

Beyond Hanson

So she’s gone. I’ve talked about her, her meaning and her impact since this diary began, so over to you. How will Pauline Hanson be remembered?


Last year several readers recommended a speech Dr Peter Brain made in Melbourne on globalisation, Australia and the health of our democracy as part of the Alfred Deakin lecture series. Regular Webdiarist Peter Gellatly is the latest, so here it is. Reading it in the light of Pauline’s withdrawal from politics is a fascination. (The Deakin lectures are available on Radio National’s webpage,


Dr Brain is the Executive Director of the National Institute of Economic and Industry Research (NIEIR). He co-founded NIEIR in 1984 and has since participated in over 150 economic consulting projects in South Africa, Australia and New Zealand. He was one of the few economists to forecast the current economic crisis throughout the Asia region. His most recent is Beyond Meltdown – The Global Battle for Sustained Growth.




By Peter Brain




A hundred years on, Deakin’s economic objective of strong state regulatory control over strategic industry operations and his vision of the state supplying strong leadership and resources to drive national development, are almost the exact opposite of the prevailing Australian political wisdom.


The prevailing conventional wisdom as defined by the doctrine of extreme economic rationalism is that the market, that is the private sector, knows best, both in terms of maximising the efficiency of short term resource use and in terms of the mobilisation and allocation of resources to drive economic development.


The role of the state under extreme economic rationalism is largely passive, confined to the protection of state borders and property rights. Under this doctrine the active role of the state focuses on measures to remove any constraints on businesses’ and households’ ability to pursue whatever objectives they select. Since the private sector knows best, this policy objective by definition will maximise national economic and community welfare.


Deakin was right. Any economy which is currently well placed to exploit the 21st century opportunities of globalisation has followed the Deakin vision of using the state to drive the creation of the high technology industries, used the state to create world best practice infrastructure, and the strategic regulation of industry. The examples extend from the North Asian economies to Western Europe and back to the United States. The US Government’s long term support for its military-industrial complex is the most important explanation for the recent renaissance to the US economy. The crushing of the anti-Deakin New Zealand by the Deakinisque Ireland in terms of economic performance over the last 15 years is a clear cut example of the model’s superiority.


Unlike these countries, Australia has not developed to any significant extent the 21st century industries of advanced electronics, information technologies, biotechnologies and advanced materials. Further, unlike Norway which used its strong mining industry to build a world best practice heavy engineering industry, Australia has virtually destroyed that industry.


My aim tonight is to offer an explanation of why extreme economic rationalism have uniquely flourished in Australasia and the current and future cost of this outcome.


The clue to why it has flourished lies in the fact that extreme economic rationalism is essentially an anti-democratic doctrine. Its central proposition is that the community should not extend its control into many areas that are important to community welfare. Implicitly, economic rationalism endorses the primacy of established private interests over future private interests as well as over current and future collective community interest. Representative democracy of course was designed to obtain a fair balance between the individual and collective interest.


An undemocratic doctrine can flourish only in an undemocratic society. The core argument of this address is that in Australia this indeed is the case for strategic economic issues and it has imposed considerable costs on the nation. I want to make clear that my link between democracy and policy only applies to policies influenced by economic rationalism.


It also follows that for Australia to be better placed to exploit the opportunities of globalisation and to manage its threats it is necessary to understand how Australia’s political context has retarded performance in the past and that therefore the solution lies in changes to political rather than economic structures, processes and institutions.



1. The Australian political institutional context


To describe a society as democratic is not a very useful guide to public policy formulation. It is about as useful as inferring personal characteristics from the fact that somebody is described as a Christian.


A far more useful approach is to specify models of policy determination and to assign models on the basis of outcomes on an issue by issue basis. By issue is meant the process of finalising the outcome for specific community and economic policies that require a parliamentary solution.


There are at least four such models, namely:


* grass roots democracy;


* representative democracy;


* dictatorship by the political leadership; and


* dictatorship by established interests.


Australia has a strong institutional democracy in that the competition for political power is intense. A strong institutional democracy is a necessary, not sufficient, condition for democratic practice. Democratic practice can only be determined by assigning the actual decision model used on an issue by issue basis.



1.1: The importance of the representative democratic model


By far the most important decision making model in terms of the long run protection of the national interest is the representative democratic model.


There can be no general blueprint for social and economic development as economic life does not conform to a coherent or predictable pattern. Change and chaos are the constants, not stability, and change involves continued pressure being brought to bear against the established social and political fabric. Intellectual paradigms and ideologies rise and fall as events and facts change.


There is no fixed compass for the present and the answers are further complicated by the fact that decisions also have to be made which will affect future generations, who are as yet unrepresented. Such decisions typically involve a tradeoff of lower current living standards in favour of higher future living standards.


For the general electorate the issues are far too complicated for effective analysis and in any case there is no general permanent solution. All that can be done is for elected representatives to be provided with a framework so that the necessary conditions for representative democracy are in place. In turn, governments can use the countervailing power provided by representative democracy to manage existing established interests, ensuring that they do not secure a stranglehold on niches of economic and political power. It can also encourage new entrants into all facets of society and constantly promote competition for economic and political power.


Grass roots democracy is no substitute for representative democracy. Grass roots democracy only works in Australia when the issues are simple and affect a significant proportion of the population. Further, it can only generally act to remove actual or proposed resolutions to issues.


To survive, representative democracy must have strong institutions and leadership. Democracies are unstable and there is constant pressure towards the dictatorship models for many core issues.


1.2: Australia is not a strong representative democracy


A working definition of a representative democracy would be one where the individual elected representatives are not without a degree of influence to, at worst, protect and, at best, enhance the interest of their constituents (whether by geographical location or interest group membership) irrespective of the government of the day. The representative democratic model prevails when elected representatives, applying pressure through parliamentary institutions, play a strategic role in determining outcomes.


Australia, of course, has little of the institutional characteristics of a strong representative democracy. Australia up to now has:


* a strong two party system;


* strong party discipline with members who do not toe the line as laid down by the leadership group facing de jure dis-endorsement as is the case with the ALP and de facto dis-endorsement as is the case with the Liberal Party. At the very least members who are not judged team players cannot expect a career beyond that of a backbencher;


* on the floor of the House of Representatives a government generally faces no prospect of defeat; and


* representatives have almost no direct role in designing and drafting legislation.


Under the Australian Federal model, the process to begin the introduction of new policies, or to amend existing policies, requires the support of a small number of senior ministers, bureaucrats and senior party officials which comprise the political leadership group of the government of the day. The resolution of many issues in Australia therefore operates under the dictatorship of the political leadership model. It is in the interest of any leadership group to impose the dictatorship model if allowed. It makes management of the political process much easier and limits and controls the competition for leadership positions. The mantra used for control to support the dictatorship of the political leadership in Australia is “disunity is death”.


Sometimes there appears to me to be little difference between the roles of the parliamentary deputies under the Communist system and their current Australian counterparts. The role of the backbencher is that of a listening post in his or her electorate, to travel to the centre, feed the information in, and receive back the revised spin on the leadership group’s performance and objectives. They then travel back to impart the new wisdom to their electorates.


The Senate in Australia is a representative democratic institution. However, its weak mandate and the small number of representatives holding the balance of power, rightly, weakens its power.


The leadership group dictatorship model is unstable. Without the strong countervailing power of representative democracy the political leadership dictatorship model in many cases is either merged with the bureaucratic leadership model or is replaced by the dictatorship of the established interests model. Under this model issues are resolved without significant modification in favour of established interests irrespective of the impact on the national interest.


1.3: Interests: dictatorship model eligibility


Of all established interests only a minute number are eligible to establish a dictatorship model. Eligibility requires the ability to deliver value to the political leadership group. The dictatorship model is limited to:


* interests which can build a favourable image of the leadership groups (that is, media interests);


* interests which have the credibility to audit the government’s performance (the finance sector);


* interests which are small, collective and can deliver a significant contribution to the national interest ( the mining sector); and


* interests which can give governments something governments cannot do such as short term pump priming (the finance sector again).


2. The dictatorship of the established interests: the ideological dimension


Dictatorship by established interests cannot be established or sustained without a supportive ideological framework. Extreme economic rationalism is ideally designed to establish legitimacy for regimes of dictatorship by established interests. It could only grow in Australia because representative democracy is weak and in turn it now legitimises weak representative democracy as the ideal.


Economic rationalism legislates the dictatorship of established interests in exactly the same way as Marxist-Leninist doctrine legitimised the dictatorship of the proletariat.


The doctrine of economic rationalism was used to crush the Deakinites in the Liberal Party in the 1980s decade. By replacing a broad church with a fundamentalist sect, on current trends, the Liberal Party will possible be restricted to representing the wealthiest areas in Australia.


The Labor Party, by using extreme economic rationalism to crush vision, passion and ideology within the Party, will probably not achieve its core objective of the natural party of government.


The National Party, representing the poorest electorates in Australia, by following a policy of de facto fusion with the Liberal Party representing the wealthiest areas in Australia, possible faces extinction.


It is worth noting that Deakin himself, of course, contributed to the political structures which would ensure that his political vision would eventually die. He rallied against the “three eleven” party structure that initially existed in the first three parliaments claiming that it was unworkable. He worked towards a strong two party system and eventually achieved this with the fusion of two of the elevens.


Why did it then take so long for economic rationalism to become pre-eminent in Australia? After all, the political structures that have facilitated its rise have been in existence for 92 years. The answer is external shocks. The first and second World Wars and the depression made nation-building and social balance imperative for the maintenance of economic and political sovereignty.


The turning point was around 1970 when leaders who had been in politics over the 1930s and 1940s started to retire. Their successors simply did not have the experience of nation-building and therefore the leadership qualities to offset weak representative institutions.


To sustain their support of the ideology of economic rationalism, institutions have to behave in the same way as the Marxist-Leninist institutions behaved when supporting the dictatorship of the proletariat. A prime example is the Productivity Commission, the official Economic Rationalist Institute.


By using so-called computerised general equilibrium models the Productivity Commission has been able to impose untested assumptions on the way the industries operate, and so guarantee that any model application will “empirically” validate the quantitative conclusions of economic rationalist principles.


Ideologically driven research methodologies allow the Productivity Commission to infer that productivity growth is independent of the rate of growth of output and, therefore, allow the it to claim that its general policy agenda known as microeconomic reform, has played a key role in the acceleration in Australia’s productivity growth over the last six years. In fact, the recent acceleration in Australia’s productivity growth is little more than would be expected from the acceleration in economic growth over the same period, even on the basis of the “dark age” outcomes of 1969 to 1974.


Microeconomic reform clearly has resulted in market improvements in productivity at the individual industry level. However, part of the productivity growth is either illusionary in that it has been driven by outsourcing, which transfers costs to other industries, or is achieved at the cost of long run productivity gains. The latter occurs through the elimination of the resources required for long run capacity expansion, research and development, knowledge-retention and nation building capacity.


In terms of general government and the media, some of the public servants and opinion writers seem just as brainwashed by the doctrine of economic rationalism as their counterparts under the dictatorship of the proletariat were brainwashed by Marxist-Leninism.



3. Australia’s increasing strategic weakness and the price of economic rationalism


The influence of economic rationalism, either directly as an ideology or indirectly through creating dictatorships of established interests, has led to a number of outcomes which have, and will continue to, weaken the ability of Australia to compete effectively in the globalisated world of the 21st century and to retain economic and political sovereignty. The weakness comes from the impact of economic rationalism on:


* industry development;


* the exchange rate;


* foreign ownership;


* the finance sector; and


* regional development.


3.1: The costs of non-representative democracy: industry policy


The standard approach to industry development policy in Western Europe and North Asia is straight-forward and heavily public sector driven. Governments decide what emerging industries are likely to be strategic for their economies. Public sector budget allocations then fund:


(i) research institutions with mission statements to become world best practice knowledge centres in the targeted technology;


(ii) educational and training programs to create the domestic skills to exploit the targeted technology;


(iii) heavy assistance to corporations to fund the innovation required to gain a competitive edge in the production phase of the new technology; and


(iv) capital subsidies of up to 50 per cent or more of cost to encourage factory construction in the new technologies.


This model has never been used in Australia to anywhere near the extent necessary to hold the share in manufacturing at desired levels. It has, and is, only being used to hold the size of motor vehicle industry in the face of tariff phasedowns. The fact that this model has not been used generally is the single most important reason explaining Australia’s chronic current account deficits and the steady degrading of national sovereignty through ever increasing foreign obligations.


Australia’s failure to adopt the standard approach is perplexing. When very weak versions of it were applied between 1984 and 1996, they were spectacularly successful in driving production growth in pharmaceutics (Factor f scheme), shipbuilding (subsidies), engineering (DIFF scheme) and export growth for industries which received export assistance. The benefits from these schemes were reduced or ended with the Coalition Government’s attack on business welfare based not on the facts, but on economic rationalist ideology. It is rough justice that, just when the government needs a strong manufacturing sector to offset general economic weaknesses, it has not got it, and this failure is partly due to its own actions. If Australia had a strong representative democracy in 1996 this would never have occurred.


Australia now has no concept of strategic industries, and the prevailing conventional wisdom is that a million dollars worth of output from any of the computer chip, wood chip and potato chip industries is of equal benefit to the economy.


Economic development in Western Europe and North America has been driven by the core premise that there are strategic industries and it is the role of government to do whatever is necessary to ensure that these industries take root in the economy. Governments in these continents know that economic development is about the application of new knowledge. Benefit from new knowledge can only be gained if it is embodied in a new product or process.


You know that you are living in a regime of a dictatorship of established interests when potato chips are valued equally with computer chips. By definition some dominant established interests (such as the finance sector) will become dis-established if governments come to believe that some interests are more valuable than others. This is particularly threatening to established domestic interests when the higher valued interests will have to be imported from overseas (as is the case for the most new technologies). This would upset the local power structure and balance. The potato chip equals computer chips mentality leaves the finance sector unconstrained to generate profits where ever it chooses.


The cost of the lack of industry policy in Australia is not just weak short term fundamentals. The main cost is that Australia is now ill-equipped for the economy of the 21st century. Economic growth is now being driven by “global city regions”, which have strong concentrations of emerging and traditional industries offering a diverse range of high income employment opportunities so as to attract the world’s best skills to work there. Diverse knowledge clusters and networks are formed which allow maximum innovation to be combined with existing information in traditional industries to drive broad-based industry development. Traditional industries, such as textiles, food production, engineering and motor vehicles, are benefiting just as much from “global city” structures as the new communication and electronic industries.


Australia, by not being experienced in the production side of most of the new technologies, is:


(i) eliminating an important conduit for the adaptation of the new technologies to traditional industry; and


(ii) is not gaining the innovation and management skills which will be required for participation in the world-wide supply chains of the future;


(iii) is not creating the long-run high-income employment opportunities required to offset employment losses that will stem from the application of the labour saving component of the new technologies to traditional industries; and


(iv) is ensuring that the benefits for research and development and education resources in the new technologies will accrue to other countries as Australia’s skills and knowledge migrate overseas due to higher returns.


In short, the destruction of Australia’s traditional non-resource manufacturing base will continue and the proportion of full time jobs paying reasonable wages will continue to decline.


If Australia had a strong representative democracy in the 1980s, the Norwegian route would have been followed with mining industry expansion and Australia would now have a first class heavy engineering industry.


3.2: Dictatorship by established interests: the finance sector


The doctrine of economic rationalism has been exploited by the finance sector, in conjunction with weak accountability to representative democratic institutions, to create a situation where monetary policy has de facto been privatised in Australia. By this is meant that in Australia monetary policy is largely run for the benefit of the finance sector and not in the national interest.


All monetary authorities have an inflation target in their objective set. In Australia the financial economists, whose views dominate the Australian media, have forced general acceptance of the view that the inflation target is the only appropriate target for the Reserve Bank. In effect they have reversed the monetarist dictum that money matters to one of money doesn’t matter. Moreover, where decisions are made to change interest rate settings, the reasons should be transparent and, therefore, predictable.


The first point to be made is that direct inflation policy targeting by monetary authorities is now a relatively low priority exercise. This is because skill-based technological change has broken the back of organised labour. The unions can no longer secure economy-wide wage increases on the basis of the principles of comparative wage justice. Secondly, the pressures of globalisation, and the impact of the new technologies in opening up international import competition, including across a range of service industries, has greatly limited the ability of producers to pass on costs.


With the RBA safely occupied with irrelevant CPI targeting, the finance sector has a free hand in exploiting opportunities across a wide range of revenue maximising opportunities. This is done by building the demand for debt to finance activity in the share, property, mergers, acquisitions and consumer credit markets. CPI targeting in a regime of low inflation rates means that the finance sector has unlimited scope to increase its revenue base at the cost of national financial instability.


And that is what has occurred. Between 1998 and 2000 the growth in private sector debt has meant that the financial deficit of households and non-finance private business total reached 6 per cent of GDP. By contrast the historical average up to 1980 was a surplus of 3 per cent of GDP. Australia has now reached the same financial deficit level that was reached in the United States in 2000 and that was reached in the United Kingdom in 1989, triggering that country’s severe 1990-1992 recession. It is the main reason why both the United States and Australia are experiencing, and will experience for some time to come, poor economic conditions.


Has the same thing happened in the representative democratic countries of Europe? The answer is no. Europe now enjoys financial balance across all the sectors – across the household, corporate and government sectors. As a result, Europe is likely to grow relatively strongly over the next decade. In Australia and the United States, if the finance sector calls for relief by too rapid an easing of monetary policy are delivered, both countries risk economic stagnation by debt constipation, Japanese style.


The reason for the European outcome is that monetary policy has not been privatised and there is an intermediate target which the European Central Bank pursues. It holds broad credit expansion at the desired expansion rate of nominal GDP, which is in the vicinity of 4 per cent a year. In Australia, by contrast, the rate of growth of credit has for a long periods since financial deregulation, been between 50 and 100 per cent greater than the rate of growth of actual nominal GDP.


The real threat of inflation in Australia over the next few years comes from the risk to the exchange rate, which in turn comes from the financial imbalances created by the lack of monetary policy. Australia will not create the pre-conditions for long run sustainable growth until the current dictatorship of the finance sector over monetary policy is crushed. This would involve paying real respect to a much broader range of monetary policy targets, including imposing maximum credit growth rates. Monetary policy changes must also become unpredictable once again.


However, close strategic regulation of the finance sector is also required. All countries with advanced manufacturing sectors have learnt that without regulation or strong incentives the finance sector will not, by itself, develop the high risk new industries required for success in the 21st century globalised economy. Australian governments have the following choices to develop these industries:


* they can do it themselves, as they did with telecommunications, energy, transport and biotechnology in the past (the Taiwanese strategy);


* they can heavily subside multi-nationals to do it (the Irish strategy); or


* they can, by regulation, compel the finance sector to do it (the North Asian and German strategy).


The current dictatorship by the finance sector means that the effective national interest is defined by the incentives in fund manager remuneration packages. What a stupid way to run an economy.


You know you are living in a regime of dictatorship of established interests when blatant hypocrisy is successfully employed to enhance interests. The finance sector argued long and hard in the late 1980s and early 1990s that Australia’s low household savings rate was detrimental to long term economic performance. The superannuation levy, with enormous benefit to superannuation funds, was imposed to increase household savings. The policy failed and household savings at the end of the 1990 decade were negligible, compared to the 9 per cent level at the beginning of the period. Judging by the strong endorsement of the finance sector to the strength of Australia’s economic fundamentals over the last few years, one can only conclude that negligible household savings are now good for sustainable development. Not unexpectedly this switch has gone without much comment in the media generally.


3.3: Non-representative democracy: the mining sector


In Australia there is no exchange rate policy other than allowing the exchange rate to fall to whatever level is required to protect the cash flow of the established mining and agricultural industries. The long run trend in the real prices of these industries’ products (excluding energy) is downwards. The continuation of this policy will lock Australia into stagnant or declining living standards in terms of world purchasing power.


The reversal of this stagnation will require governments to aggressively move Australian industry up the value added chain and to explicitly adopt a high exchange rate policy. Below a certain point, a low exchange rate coupled with the long-run expectation that the exchange rate will decline further, blocks the emergence of new industries in Australia. New industries require:


* skills, capital and technology to be imported from overseas;


* skills be retained in Australia;


* components be sourced from overseas from world best practice suppliers;

development and marketing funds be spent overseas; and


* the capital base of the industry be protected from takeover and elimination.


The lower the exchange rate the greater the cost and the greater the risks for the establishing of new technologies in Australia. Therefore, under the current exchange rate regime nothing of significance is likely to happen. One cannot be optimistic in regard to the future living standards of Australia in terms of world purchasing power.


It is difficult to be too hard on the mining and agricultural industries. The mining industry is preventing Australia from becoming the New Zealand economic basket case. The economic grind and suffering of farmers delivers to the cities a high living standard.


However, in the future an accord will be necessary with the agricultural and mining industries to set the conditions for Australia moving up the industry value added chain. This accord will be best negotiated in the context of a strong representative democracy.


3.4: Non-representative democracy: regional development policy


Nothing better illustrates the weakness of representative democracy in Australia than the absence of regional development policy.


In Western Europe regional development policy is seen as the strategic instrument for ensuring that skills, infrastructure, capital and income are distributed to all citizens.


In Europe regional development policy is integrated with industry development policy. The same is also true in the Untied States where the legislature imposes line item entries determining what budget appropriations are spent on and where they are spent.


Regional development policy cannot flourish without statistical regional performance measures. In Australia, as distinct from Western Europe and the United States, the regional statistical data are extremely poor. In my view this is a telling measure of the weakness of representative democracy in Australia vis-a-vis other jurisdictions.


What good regional development policy does is to extract resources from the winners of economic growth by taxation, and by government expenditure allocation to redistribute the benefits to lagging communities. This allows these communities to eventually directly benefit from economic growth without assistance. The absence of regional development policy, therefore, suggests that the direct winners from economic growth have imposed a dictatorship model to corner all the gains.


In Australia over the last two decades the winners from economic growth, heavily concentrated in the Northern and Eastern suburbs of Sydney and the Eastern suburbs of Melbourne, have used the weakness of representative democracy to prevent redistribution, even though this is required to ensure long run sustainable development. Based on social security data, the majority of country and provincial regions now have an unemployment rate of between 12 and 25 per cent compared to 2-4 per cent for the winner Sydney suburbs. South Australia and Tasmania have been particularly adversely affected. In part this is due to the fact that Australia now has an overall tax burden equal to the United States, while the European standard is 10 percentage points higher. The optimum for Australia, I think, would be half way between the United States and Europe, translating to a tax burden of about 35 per cent of GDP. The United States, a dominant economy, can afford lower tax rates.


If this was achieved, Australia would have the funds to:


(i) develop industries;


(ii) educate the population;


(iii) clean up the environment;


(iv) reduce regional and household income inequality; and


(v) put in place first class infrastructure for national development.


To continue as we are will ensure that the electorate will become more unstable until new parties emerge to force redistribution. However, by then Australia will be so far behind that catch-up costs will be very high. They may well be prohibitive in the context of maintaining political and economic stability.


If the National Party, over the past 50 years, had stayed on the cross benches and delivered to Australia a stronger representative democracy, the economic inequalities between Australian regions would now be a lot less – just look at what minority Labor Governments have done for regions in Queensland and Victoria over the past four years.


3.5: Non-representative democracy: foreign investment


Direct foreign investment can be both a driver of the globalisation of domestic industries and an international tool for the destruction of domestic industries to eliminate the threat they pose to existing globalised industries located elsewhere. Some direct foreign investment can be extremely beneficial and some can be extremely destructive. Destruction occurs when local firms with a competitive edge in global markets are eliminated from that market by foreign takeover. The skills, knowledge and technology in these firms is then transferred to foreign firms.


How much of recent foreign investment in Australia has been constructive or destructive is unknown. The Foreign Investment Review Board operates without accountability of any form.


The fact that a large share of Australia’s strategic companies is foreign owned, coupled with the fact that Australia over the past two decades has not grown any of the new national champions necessary for success in today’s integrated economy, is prima facie evidence that representative democratic accountability for the FIRB would have served Australia better. The evidence for this is to be seen in the recent blocking of the Shell proposal to take over Woodside.


The Woodside Decision


This decision shows the best and the worst of Australian democracy. The correct decision was made in the national interest. However, it was the isolated power of representative democracy that forced the Treasurer to judge the takeover in terms of the national interest. Without that pressure the takeover no doubt would have been allowed.


With a couple of honourable exceptions the response to the decision by media commentators was based on pure ideology. Economic rationalism dictates that market decisions are always in the national interest. By this criterion, the government has committed the mortal sin of allowing political (that is, democratic) principles to determine the outcome.


Shell’s diverse resource holdings meant that in deciding the scheduling of natural gas developments they had to act against some countries’ interest and these were good reasons for assuming that the Australian national interest that would be sacrificed.


What was more disturbing was the threat from some financial sector interests that if the Shell takeover was not allowed the Australian currency would be attacked. Unfortunately this is a portent of things to come. A quarter of a century of non-representative government and the associated economic policy errors has eroded Australia’s political and economic sovereignty on a large scale.


Media policy


Nothing better illustrates the current poor standard of representative democracy in Australia than the recent example when the electronic communications regulator (MARGO: The Australian Broadcasting Authority, via its head, David Flint) in effect advocated on behalf of the interest of the two dominant media purporters by arguing that since the media commentators were more influential than the proprietors. Therefore the degree of concentration in the media doesn’t matter. Only someone with an intelligence level of less than freezing point would accept this. Any representative democracy would have had the regulator sacked within 24 hours.


As the existing political system comes under pressure the attempts to control the role of the ABC will become more ruthless. In my view the strategic importance of the ABC to developing Australia’s representative democracy is so high that I would be comfortable with the role of the ABC being the only issue at the next Federal election.



4: Australia’s economic performance has been weak


The legitimacy of political regimes depends on whether or not sustained economic and social development is achieved. It is a sign of the lack of representative balance in Australia’s political structures that the strengths of Australia’s recent economic performance have been highlighted, while the weaknesses have been ignored.


The strong points of Australia’s recent economic performance which are continually highlighted are:


* high absolute and relative GDP growth rates;


* high productivity growth rates;


* low unemployment rates;


* low inflation rates; and


* strong government finances.


Growth over the second half of the 1990s has been high relative to Europe. However, part of the reason for this is statistical illusion. Australia, along with the United States, uses quality price adjustments to account for product innovation. The Europeans, so far, have not done this and as a result their GDP growth is statistically low, though in fact it probably is as high as that in the United States and Australia.


The official unemployment rate is 6.8 per cent. However, adjusted back to the 1990 methodology for measuring the rate, the current unemployment rate would be in the vicinity of 10 per cent. The main reason why the official unemployment rate is low is because:


(i) long term unemployed have been shifted into disability pensions;


(ii) beneficiary recipients have been required to do some hours of work a week which means they are counted in the Labour Force Survey as employed; and


(iii) youth unemployment has also been statistically reduced by benefit changes.


To be counted as employed in the Labour Force Survey all that is necessary is to work one hour a week, in some cases unpaid. The rate of full time to total employment has steadily fallen over the 1990s.


The productivity growth rates are no more than what would be expected given the statistical measure growth rates based on historical outcomes over the 1960 to 1980 decades.


Inflation is low but no lower than for any other comparable country. The reason why inflation is low is not Australia’s efficient economic management, but due to the nature of technological progress and the forces of globalisation, that is supply chain integration.


Public sector finances are now strong, but at the cost of a deterioration in private sector finances which is leading to the current rapid slowdown in economic growth.


Australia’s structural imbalances also deteriorated over the 1990s. The share of the manufacturing sector in GDP fell steadily due, in part, to the failure to enter new emerging industries in information, communication, biotechnology and advanced electronics and materials. Australia’s elaborately transformed manufacturing trade deficit is approximately 8 per cent of GDP, or at third world country levels signalling a dismal future.


Foreign ownership of Australia’s non-financial businesses is now 45 per cent of equity value and Australia’s net international obligations have steadily increased over the 1990s due to the continuing current account deficit. This has greatly increased Australia’s vulnerability to external economic shocks. Australia’s gross short term foreign debt (less than 90 days) in the late 1980s was 50 per cent of foreign reserves. Currently the level is three times reserves.

In short, over the 1990s, Australia deliberately denied itself the ability to develop a strong diversified, competitive economy.


The cost over the 1990s


Three quarters of a million people consigned to a subsistence existence. Limited effective choice in the trade-off between work and leisure. Australia is now doomed to the social darwinistic American labour model where the annual hours demanded from those with moderate to high income jobs will be in excess of 2,300 hours a year. Not for us the choice of the European standard of the Dutch with low unemployment, a happy labour force, a productivity equal to the US standard on a per hour worked basis, but with the average hours worked of 1,350 per year. Representative democracy in the Netherlands has enabled the Dutch to select a lower per capita living standard, still higher than the Australian level, but without the socially destructive American labour market model.


However, the greater cost will be incurred by future generations. Malcolm Frazer is right. To retain what is left of our effective political and economic sovereignty Australia needs to target a population of at least 40 million by 2050. The regional and household inequalities which have been, and will continue to be, built up will prevent this option from being realised.


5. The routes to greater representative democracy


For Australia to break out of the constraints of economic rationalism it needs to greatly strengthen representative democracy. There are only three ways of achieving this:


* constitutional change;


* the breakdown of party discipline; or


* the breakdown of the two party system.


The constitutional change option would involve adopting the New Zealand proportional voting system for the House of Representatives. This would require constitutional change and some established interests, via the media, would block the option.


A breakdown of party discipline would mean that both major parties would need to evolve towards the republic/democratic models in the United States. However, given the stranglehold of the slogan “disunity is death” this could only happen if both major parties simultaneously decided to reverse current practice. Not likely.


The only practical way forward is by the breakup of the current two party system where new parties, and groups of independents, emerge and control the balance of power in the House of Representatives. This will require the primary vote of the two political parties to fall below 60 per cent. This seems the route Australia will most likely follow, given current dynamics. However, the new representative democracy will only be secure in Australia if the new parties and independents use their balance of power strength to permanently change the institutional structure. Australia will have a representative democracy when the status of a Parliamentary Committee Chairman is equal to, or greater than, that of a Minister.